EBay 4Q earnings up, Icahn proposes PayPal split

Published on NewsOK Modified: January 22, 2014 at 6:33 pm •  Published: January 22, 2014
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NEW YORK (AP) — EBay said Wednesday that its earnings and revenue grew in the last three months of 2013, driven by a strong holiday season for its e-commerce site and its fast-growing payments business, PayPal.

The company also said activist investor Carl Icahn is seeking a non-binding shareholder resolution to spin off PayPal. EBay said the billionaire investor has nominated two of his employees to the company's board and now owns a stake of 0.82 percent in the San Jose, Calif.-based company.

Shares of eBay rose $2.99, or 5.5 percent, to $57.40 in extended trading.

But eBay said it has looked into a split and does not believe it would be the best move for shareholders. CEO John Donahoe said in a letter to employees that spinning off PayPal is also not a new idea, and that "we must not let Mr. Icahn's proposals become a distraction."

In an interview, Donahoe said eBay has helped propel PayPal's success, by not only generating new users, but by sharing data that helps PayPal manage risk. EBay also accounts for more than half of PayPal's profits, which helps it pursue innovation and new opportunities.

Icahn offered little detail why his proposal made sense, Donahoe said.

"I wouldn't say there is any in-depth articulation of rationale other than splitting apart the company will create shareholder value," he said. Donahoe said he will pass on the Icahn's nominations to the board, but said they'll be held up against its already "world-class" members.

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